Percentage of cleaning services IN HOMES AND apartments

• About 75% of U.S. cleaning services are hired for homes. The other 25% are hired to clean apartments.

How services are usually advertised to customers

• In the U.S apartment / residential cleaning services are usually advertised through three means: applications, websites, and online platforms (the majority in 2018) or via telephone (a call center).
• The main way to hire residential cleaning services in the U.S is through companies that manage a cleaning staff. Most of the companies in operation in the U.S are franchises.

Price ranges for CLEANING SERVICES

• According to the most recent survey by the Bureau of Labor Statistics (2017), the average hourly rate for residential cleaning services in the U.S is $20.24.
• According to Buckets & Bows and Thumbtack, the average cost of house cleaning is $25-50 per hour per cleaner. The total price depends on the size of the home and type of cleaning. A 3-bedroom, 2000 square foot home costs $150 to $250 to clean on average, while a one-bedroom apartment starts at $80 to $110. Deep cleaning, laundry, window cleaning, and move-out or event cleanup will add to the cost. 
• In addition to the size of the home, other factors that influence the price are the frequency with which the client requests the residential cleaning, if it will provide the cleaning products and if there are pets at home.

TYPICAL CUSTOMER OF THE house/apartment cleaning SERVICE

• According to data from the Small Business Development Center Network (SBDCNet), the main target market for residential cleaning services in U.S. includes individuals with above-average annual family income, generally above $100,000. 
• In the U.S., the demand for house and apartment-cleaning services is most popular with people of higher than average wealth looking for a little more free time. 
• Consumers who spend their income on cleaning services are often part of a two-income household. 
•  Other consumers of household cleaning services include families with elderly members living in the home.

Is the industry currently profiting or not?

• The residential cleaning industry in the U.S experienced a financial crisis in 2008/2009, but today is very profitable. 
• Revenues from house/apartment cleaning services grew 3.2% a year to $65 billion in 2019.
• Industry analysts predicted that growth in US residential cleaning services in 2019 will result in "an increase in the percentage of households with annual incomes over $100,000, with numbers rising from 23.1% of the US population in 2014 to 24.9% by 2019."
• Analysts also foresee "an increasing number of families with two incomes and a demographically traditionally more willing to pay for domestic cleaning services."
• The residential cleaning industry is very competitive. Marketing and choosing the right locations are a few crucial elements for running a successful business.  
• Large populations of wealthy families ensure consistent business and high revenue for residential and apartment cleaning services.
• Another factor that boosts the sector's profitability is the growing number of elderly individuals in the United States. The increased average age for a US citizen has created a demand for industrial services that help the elderly in daily tasks.

3 key players in the market

• According to First Research,"fragmented, with the 50 largest companies generating just 30 percent of revenue and no business owning an overwhelming majority of the market."
• MaidPro and Home Cleaning Centers of America are the franchises with the highest visibility in the industry in the years 2017 and 2018.
• These companies only higher professionals and use OSHA-approved cleaning products. Their business models are used as a basis for other companies.
•  Lack of communication and trust are some leading factors that cause consumers to switch their cleaning service. However, Maid Pro and Home Cleaning Centers of America excel in these categories. 
• The American company Merry Maids is another example of a successful residential cleaning service. It offers a full range of domestic cleaning services, including ecological cleaning, and a satisfaction guarantee, or they will clean your space again with no charge.
• Molly Maids also meets the new safety restrictions that began in 2018 with their Design for the Environment (DfE).

3 trends IN the RESIDENTIAL cleaning industry

• Make it easy for homeowners to contact the companies that offer residence cleaning services, mainly through social networks (Facebook, Instagram, twitter and whatsapp).
•  Since 2017, all major companies have adapted to communicating with customers through social media. Most companies that do not adopt this change now face bankruptcy. 
• Examples of US residential cleaning services companies that have successfully transitioned include My Amazing Maid and Handmaid Cleaning. 
• My Amazing Maid keeps a blog, updating it with news from cleaning culture. They share these posts on their social media networks. The Maid swapped paid magazine ads for Instagram and Facebook posts and chat on their site.
• The company Handmaid Cleaning has experienced much success using Facebook Messenger to contact customers, claiming 100% responses, as opposed to the 40% they were claiming with their old forms of communication.

• Sustainability is a very big trend in the apartment and house cleaning service industry. Companies that are not adapting to green housekeeping standards have lost a large number of their customer base to companies who highlight and focus on green and environmentally-friendly cleaning solutions.
• In the last 5 years, consumers have placed a huge emphasis on wanting a commitment to clean and sustainable cleaning solutions, and have consistently demonstrated this with hiring services that promise these cleaning procedures.
• In the U.S. residential cleaning industry, companies like Clean Focus Services, Filta Environmental Kitchen Solutions, Enovana Green Cleaning are offering environmentally-friendly services and have increased their profitability because they have increased their, clientele, and charge for the increased value of their services due to their commitment to sustainability.
• The trend has had a large enough impact that customers now are calling for green-certified companies such as Leadership in Energy and Environmental Design (LEED), CIMS (Cleaning Industry Management Standard) to include the Green Building (GB) criteria.

• The implementation of payment technologies markets is a very strong trend in the US house / apartment cleaning industry.
• Some companies that have not adapted and are being replaced by companies with prepayment technology.  
• The market for cleaning houses and apartments in the U.S does not have systems to ensure customer loyalty, so if the company does not fit the needs of the client, it is replaced.
• Another factor that demonstrates this trend is the public's desire for a process that reduces the amount of time spent dealing with setting up and paying for the service.
• Customers accustomed to an online payment or prepayment function with services like Uber will continue to expect other industries to adopt this technology.
• Tools such as Joober have been acquired by strong industry players like Harding's Cleaning Division, The Maid Mentor, and Clean Focus Services, which have all invested their efforts in payment automation tactics and the trend is proven to increase their profitability.

1. MILLENNIALS AND BABY BOOMERS CONTROL THE PET WALKING INDUSTRY

• The majority of first-time dog owners across the United States are millennials.
• Customers of the pet walking industry are most "likely tech-savvy millennials," participating in economic activities (those who are employed).
• Millennials are taking over from baby boomers as the generation that has the highest number of pet owners and are also reshaping the industry with rising demands.
• Millennials now account for 38% of pet owners while boomer makes up 35%, according to information attributed to the American Pet Products Association.
• Millennials and baby boomers collectively account for 73% of pet owners across America and are most likely to patronize the pet walking industry.

2. RISING USE OF DIGITAL MARKETPLACES BY PET WALKERS/PET PARENTS

• Millennials are known to account for the most significant percentage of pet owners and increasingly utilize their mobile devices to request on-demand pet walking services.
• According to Dogtopia, one of the trends shaping the pet care industry is the increasing use of walk-arranging apps and mobile devices to request for cheap services for pets.
• Wag, one of the top operators offering on-demand dog-walking, sitting, and boarding services within the pet care industry, focuses on the mobile marketplace.
• Wag and Rover are among the newest and most significant players in the booming pet care industry based on venture capital funding and operate through digital marketplaces helping pet owners to find dog walkers.
• Rover has raised more than $300 million through venture capital funding. Wag, the operator of a mobile (digital) marketplace and on-demand dog-walking services, is one of the top industry players with $8.9 million in venture funding.

3. SIGNIFICANT INDUSTRY CHALLENGE: LOSS OF PETS IN THE HANDS OF PET WALKERS

• Several pet parents have lost their pets while in the hands of pet walkers. Recently, a pet owner by the name Nicole DiCarlo, lost a 4-year old pet while on a walk facilitated by the pet care startup known as Wag.
• The cost of finding a pet that goes missing during a walk can be a significant challenge to dog walking companies. Wag, a pet walking company, recently paid for the printing of flyers and opted to cover the $5,000 reward to the finder of a pet that went missing during a walk. Wag also incurred additional costs by hiring a professional dog tracker.
• According to a recent Vox web publication, Nicole DiCarlo is not the only person to lost a pet while in the hands of pet care companies, as several other cases exist.

4. Proliferation of on-demand dog-walking SERVICE PROVIDERS

• According to Vox, new trends in the dog walking sector include emerging "on-demand vet services."
• According to Schneider, the CEO of Wag, reveals the most significant innovation of the company to be "the on-demand services it brings to pet care."
• Rover, another dog walking company, recently added "on-demand dog walking to its product suite," in reaction to Wag's recent offerings.
• On-demand dog walking services of Rover and Wag cost about $20 for a 30-minute walk duration or $30 for a 60-minute walk.
• Wag, the operator of a mobile marketplace and on-demand dog-walking services is one of the top operators within the pet care industry with $8.9 million in venture funding.
• Rover is planning to expand its on-demand pet services to cover pet grooming.

5. Pet WALKING: RISING CASES OF INJURIES/BONE FRACTURES AMONG THE ELDERLY

• Several cases of bone fractures have been reported in seniors who try to walk their dogs.
• The 2019 University of Pennsylvania School of Medicine report reveals that fractures related to pet walks have more than doubled in 2017 when compared to 2014 statistics among patients aged 65 and older.
• Increased pet ownership is one of the factors responsible for the rising cases of injury among older adults when walking pets.
• Bone fracture injuries linked to pet walking (specifically dog walking) significantly increased from 1,671 cases as of 2004 to 4,396 in 2017, accounting for a 163% increase.

METHODOLOGY

Overview

• Between 2014 and 2019, the United States gym, health and fitness clubs industry grew at a rate of 3.5% per year on average.
• In 2019, the industry is expected to grow by 0.5%.
• One of the primary drivers of the growth in the fitness industry is rising per capita disposable income. In the United States, the per capita disposable income is expected to rise in 2019.
• Other factors affecting the industry include "growing life cycle stage and low revenue volatility."
• Fitness International LLC holds the largest market share in the United States gym, health and fitness clubs industry.

Market Size

• The United States fitness apps and wearables market segment is worth $3.7 billion.
• According to IBISWorld, the United States gym, health and fitness clubs industry is valued at $36 billion. This industry valuation is inclusive of personal trainers, membership fees, guest admissions, meals and beverages, and merchandise sales.
• The personal trainers segment is valued at $9 billion in 2019.
• Therefore, the total market size of the fitness industry in the United States is $39.7 billion ($3.7 billion + $36 billion).

Research Strategy

Market size of the apartment/house cleaning industry in the United States

• A report revealed that the house cleaning services industry or residential cleaning services are in high demand among people with wealth above average.
• In 2017, the market size of the United States residential cleaning services was approximately $16 billion.
• In 2018, the market size of the United States residential cleaning services was approximately $17 billion.
• In 2018, the residential cleaning service franchise market size was $924.7 million.
• In 2019, the estimated residential cleaning service franchise market size is $943.1 million.
• In 2019, the United States market growth rate for residential cleaning service franchises is 2%, while the growth rate from 2014 to 2019 is 2.8%.

Pet walking market size

• The U.S. Dog Walking and Sitting: Sector Analysis for Q3 2017 states the dog walking market was worth approximately $900 million according to IBISWorld and that this amount "does not include dog sitting."
• The 2017 IBISWorld report on the dog walking market is no longer available, as it has been updated to the 2018 dog walking report, which puts the market size at $1 billion; however, it is unclear if this includes both dog walking and dog sitting or just dog walking.
• Using the 2017 IBISWorld market size of $900 million and the projected growth rate of 3.1% for the dog walking segment only, the calculated 2018 market size would be about $927.9 million.
• Using the 2017 IBISWorld market size of $900 million and the projected growth rate of 3.1% for the dog walking segment only, the calculated 2019 market size would be about $956.7 million.

Other helpful findings

• The 2019 projected U.S. market size for the entire pet industry, which consists of food, supplies/OTC medicine, vet care, live animal purchases, and other services, is estimated to be worth $75.38 billion.
• Using the calculated 2019 market size for dog walking only, this would mean that dog walking makes up 1% of the U.S. pet industry.
• The 2019 projected U.S. market size for "other services" of the pet industry, which include "grooming, boarding, training, pet sitting, pet exercise, pet walking, [and] miscellaneous," is an estimated $6.31 billion.
• Using the calculated 2019 market size for dog walking only, this would mean that dog walking makes up 15% of the "other services" segment of the pet industry.

Research Strategy

• The 2017 dog walking market size was estimated at $900 million and was projected to grow at a CAGR of 3.1%.
• The 2018 market size would be about $927.9 million ($900,000,000 x 1.031).
• The 2019 market size would be about $956.7 million ($927,900,000 x 1.031).

• Total U.S. pet industry projected 2019 market size: $75.38 billion.
• U.S. dog walking subsegment market share: 1% ($956,700,000 / $75,380,000,000).
• The 2019 projected U.S. market size for the"other services" segment of the pet industry: $6.31 billion.
• U.S. dog walking subsegment market share of "other services" segment: 15% ($956,700,000 / $6,310,000,000).

Advertisements

• The most common forms of advertising used by pet walking services are fliers, referrals, and Craigslist listings.
• Large pet walking companies also advertise their services on national TV, newspaper, and via social media ad campaigns.
• Individual pet walkers maintain a good online presence to interact with customers. The use of videos and photos proved to be efficient in "humanizing" their pet services.

Pricing

• The cost of a single pet walk varies with time.
• A 15 to 20-minute walk costs $15 to $17.
• The charge for a 30 to 40-minute walk is between $18 and $22.
• The cost of a 40-minute to an hour-long walk is $22 to $27.
• Pet walkers also charge extra price for add-on services, such as very early morning walks and extra pets.

Profitability

• According to a 2018 report by IBISWorld, the pet walking industry is growing at a steady rate.
• The total industry revenue reached $1 billion in 2018, owing to an increased number of families owning pets.
• In the coming years, pet ownership is projected to increase, making the industry profitable.

Rover

• Rover was founded in 2011 in Seattle, WA, primarily as a pet-sitter finder for owners needing someone to watch their pets while they were away.
• It now allows owners to find boarding, in-home pet sitters, drop-in visitors, doggy daycares, and dog walkers for their pets.
• It is sometimes referred to as the "Uber for dog walking" due it being one of the most well-known dog walking services.
• The dog walking industry in the US is valued at an estimated $1 billion, while Rover.com itself is valued at close to $300 million.

WAG!

• Wag! is primarily known for walking services, but also offers sitting, boarding, and daycare.
• Owners can sign for up recurring service and are able to follow their dog's walk through GPS notifications, as well as receiving a "Pup Report" at the end.
• Like Rover.com, Wag! is commonly ranked among the most popular dog walking services.
• Wag! raised $300 million in venture capital funding during 2018, almost triple of what its goal had been.

% walking at home vs somewhere else

• A look at 5 of the most popular dog walking sites/apps (Rover.com, Wag!, Barkly, PetBacker, and Care.com) shows that all of their offered walking services involve registered walkers picking the dogs up from the owner's place of residence.
• A primary reason for owners to use dog walking services is because they are too busy or unable to physically walk their pets. Therefore, it can be assumed that it is more likely for dog walkers to come to the owner rather than the other way around.
• Of the 5 representative companies, all (100%) offer dog walking where the walker comes to the owner.

Research Strategy:

Helpful Findings

• There are 60,870,000 fitness club members in the United States.
• There are 38,477 health clubs in the US.
• The total number of US fitness trainers was 299,200 in 2016 and is expected to increase to 329,200 by 2026.
•  59% of fitness trainers work in fitness and recreational sports centers while 11% work in civic and social organizations.
•  11% of fitness trainers are self-employed while 5% work in educational service and 4% are government-employed.
• According to a survey by insights platform Alpha, 7% of those surveyed are currently subscribed to an in-home fitness class.
• According to the same survey, 27% of those who work out at least once a month has a gym membership.
• The same survey found that 54% of people are interested in buying an at-home fitness system.
• According to an article in Entrepreneur, there is a growing movement in fitness and training to replace the gym and work out at home.
• According to Ian McCaig, Co-Founder of fitness startup Fit, interactive home fitness is gaining mass market adoption and marginalizing the gym industry.
• Livestreaming workouts, studio-quality workout equipment, and virtual personal trainers are three things that drive the increase in people working out at home.
• Brands such as Mirror and Tonal are leading this trend, with professional-quality feedback systems and real-time, online instructions.
•  Wearables sales are also rising and as a result, tracking home fitness progress is becoming easier.
• The traditional gym will have to provide more services to keep its customer share away from these new online solutions.

Research Strategy:

Typical consumers — fitness training services (US)

overall:

2017:

• In 2017, 70.2 million Americans visited a health club in the US.
• Compared to 2008, this number represents a 31.5% growth, with 53.4 million health club visitors.
•  60.9 million American were health club members in the US, using the club at least 104 times a year.
• This number represents a 33.6% growth compared to 2008.

2018

• In 2018, 71.5 million consumers were served by the US health club industry.
• The number of Americans that were health club members grew to 62.5 million in the same year.

Demographics:

fitness training services:

AGE

• Gen X is the main target of health club services in US, as they hold 33% (or 19 million people) of the total number of memberships.
• Their favorite club activities are: elliptical motion, free weights and the resistance machines (source 6).
• Gen Z and Millennials represent only 35% of health club members.

GENDER:

• Men exercise more than women.
• "Males tend to be equipment-oriented, engaging more in using free weights (dumbbells, hand weights and barbells), weight/resistance machines, rowers and stationary cycles".
• "Women prefer to participate in group exercise programs, such as Pilates, dance, step, and other choreographed exercise to music, yoga and barre."

INCOME

• Wealthier people that make more than $75,000/year exercise more during the weekends.
• These people tend to do 150 minutes of moderate exercise or 75 minutes of a hard workout.
• People that gain <$20,000 annually usually do light activities during the week days.

Educational level:

• Cause and effect: "People who earn higher incomes due to higher education have access to more resources related to healthy living".
• Americans with higher education also buy healthier food.
• In a survey, 85% of college graduates said to have exercised in the 30 days prior to the research.
• With high school graduates, the number falls to 68%.

Goals: why people should purchase fitness training services

Marital status:

•  Men exercise more than women in every marital situation.
•  Single men exercises more than married, divorced or widowed men.
•  Married men are the ones who exercise less in the male category.
•  Single women exercise more than married, divorced or widowed women.
• Currently, married women are the ones who exercise less in the female category.

Home vs Facility — Typical consumer

General fitness activities:

AGE:

LA Fitness

• LA Fitness International generates an estimated $1.8B in revenue annually.

• LA Fitness provides its members with ways to improve their physical, and emotional well-being.
• LA Fitness offers a mobile app to their members that allows them to check in, manage and schedule appointments with personal trainers, get details on classes, and much more.
• In addition, LA Fitness also hosts competitive activities where members can challenge friends, join leagues, or participate in tournaments.

Life Time fitness

• Life Time Fitness generates $1.5B in revenue annually.

• Not only does Life Time Fitness strive to help members achieve their athletic and fitness goals, but they also offer members assistance with meeting their "total health objectives".
• Life Time Fitness operates approximately one hundred fitness centers in the United States, all of which stay open 24 hours every day of the week.
• In addition to Life Time Fitness gyms, the same services are offered through multiple other facilities such as health clubs, family recreation centers, sports clubs, and spas.

24 HOur Fitness

• 24 Hour Fitness generates $1.4B in revenue annually.

• 24 Hour Fitness provides training services, as well as classes to their individual members.
• Classes offered are categorized into what they consider to be four key categories: "burn, strength, intensity, and bliss".
• Assistance from instructors is available for groups of people in their GX24 class.
• Additionally, 24 Hour Fitness also has a rewards program called Fit:Perks rewards for their active members to earn discounts, awards, and passes that allow them to bring their non-members friends with them to work out for free.

Research Strategy:

FINDINGS

1. HIGH-INTENSITY INTERVAL TRAINING

•  High-intensity interval training is a current trend in the U.S. fitness training industry.
• High-intensity interval training consists of short periods of intense exercise, a short rest period, and a repetition of that pattern.
•  An example of high-intensity interval training is sprinting for 20 seconds, then jogging or walking for the next minute, followed by another 20-second sprint, and so forth.
• High-intensity interval training is a current trend in the fitness training industry because (1) it was the top fitness trend during 2018 and (2) both the Amercian Fitness Professionals Association and Precor (a fitness equipment company) list it as a 2019 trend as well, thus showing its continued growth.
•  Factors contributing to the continued popularity of this trend are people's busy schedules that don't leave much time for working out and the awareness of research that demonstrate its resulting health benefits.
• This trend is especially popular among millennials who participate in such training at boutique studios, in particular.

2. streaming fitness classes

•  Streaming fitness classes is a current trend in the U.S. fitness training industry.
• Streaming fitness classes are those that people can do at home via the internet, by following along with the instructor as they would otherwise have done in-person at a gym.
• Physique 57 and Circuit of Change are two examples of prominent streaming fitness classes.
•  The continued growth of streaming fitness classes has been such that it was recently described as finally becoming mainstream.
• Factors contributing to the growth of this trend are the busy schedules that many people juggle and the continued utilization of technology in society.
• Interestingly, this trend has not displaced gym memberships, as many people who participate in streamable fitness classes also have a gym membership.

3. older adult fitness training programs/classes

• Fitness training programs/classes specifically designed for older individuals (Baby Boomers and seniors) is a current trend in the U.S. fitness training industry. Such programs/classes are also referred to as "active aging programs."
• Some main exercise components of these programs/classes that cater to this age group include workouts that have lower intensity levels, such as Pilates, bodyweight training, and walking, plus exercises designed to increase flexibility and strengthen joints/muscles, such as cycling.
• These programs/classes also can be social in nature, as it's important for them to be fun and welcoming for this age group to participate in, instead of exercise seeming intimidating due to their age.
•  Factors contributing to the growth of this trend are the increasing participation in fitness activities among older individuals and the fact that they're remaining active and healthy for more years compared to in the past.

4. Group fitness Training

•  Group fitness training classes is a current trend in the U.S. fitness training industry.
• Group fitness training classes are those that over five individuals participate in and are taught by instructors. The individuals participating in the classes often have different levels of fitness ability and the instructor's role is to not only teach fitness, but also to motivate them and help them attain their fitness goals.
•  Key factors driving the growth of this trend are that people find the group exercise setting motivating as they work to achieve their differing fitness goals and people enjoy the communal environment of such fitness classes.
•  Some examples of popular group fitness classes are cycling, Zumba, and Orange Theory Fitness.

YOUR RESEARCH TEAM APPLIED THE FOLLOWING STRATEGY:

Findings:

Fitness training industry

• The fitness training industry comprises gyms, health & fitness clubs market refers to clubs that provide exercise facilities such as weight and exercise machines, fitness classes, personal training and other services such as health and beauty facilities, drinks, foods, equipment and clothing that are designed for users to improve and maintain their physical health.

Average Price

• In the U.S., there are now 34,000 gyms, fitness centers, and health clubs in 2017 which is 6.4% more than four years ago in 2013.
• The average price of a membership has risen considerably over the past several years. In fact, average dues have risen 17% from 2015 to 2017.
• In 2014, Average price for Gym and health clubs ranges between $50 to $200 per month depending on the type of fitness facilities.
• According to the Statistic Brain Research Institute, the average cost of a gym membership was $58 per month in 2018.
• In 2018, the average price for health clubs ranged between $40 -$100 per month depending on the age, location and whether customers are willing to sign an extended contract.

CAGR

• Over the past five years (i.e. 2014-2018), the Gym, Health & Fitness Clubs industry has grown by 2.8% in the US.
• The market for the fitness training industry (including Gym, Health & Fitness Clubs) is expected to accelerate in the future with an anticipated CAGR of 3% from 2019 to 2023.
• Thus, in 2018 the revenue for fitness training industry (including Gym, Health & Fitness Clubs) was $21.6 billion and by 2023, the industry will be expected to generate the revenue of $25.1 billion.

Profitability

• The revenues generated in the fitness training industry is as follows:
• 2019: $36 billion 
• 2018: $32.3 billion 
• 2017: $30 billion  
• The average profitability for the industry is about 25%.


Thus, the revenue for the fitness training industry has been increasing from 2016 till 2018 from $30 billion to $36 billion. The profit margin has been provided as a metric to calculate the profitability which is at 25%

Clients

• In 2017, more than 54 million Americans paid gym memberships.
• The number of Gym, Health & Fitness Clubs has grown by 2.4% from 2014 to 2019. In 2019, there were 111,055 gym, health & fitness clubs.
• In 2016, there were around 36,000 health clubs having 57 million clients. The total revenue generated was $27 billion.
• As per a Bloomberg report, more than 1 million people are signing up every year. Thus, the overall number of American gym memberships was at around 55 million in the year 2017.
• In 2018, the total number of clients in health clubs and gyms had increased to 6.1 billion, compared to 4.3 billion in 2008.

Research Strategy:

Methodology: